Grape growers of the CCW cooperative have collectively rejected the $4,000 per hectare buyout offer put forth by Accolade Wines. The vote, which took place at the CCW’s annual general meeting on Tuesday night, was voted against by almost 95% of the cooperative’s growers. Only 17 of the 331 members present voted yes, far short of the two-third majority needed for the buyout package to be passed.
Ahead of the vote, Accolade Wines’ CEO Robert Foye pitched the offer as “a constructive approach to the biggest industry challenge in many years,” stating that there is no “other feasible option on the table that allows us as an industry to manage the outcome and our future.” Its key terms included:
- Voluntary buyout.
- Relief (of $11 per tonne) from CCW’s separate bulk wine contract.
- Pricing to be “transparently set” by the weighted district average.
- Accolade’s total contracted volume to be reduced to 150,000 tonnes.
The $4,000 per hectare buyout was evaluated in lieu of Riverland Wine’s modelling for a government-funded exit, published April. Feedback provided to the ABC, however, reflects that $4,000 is less than 10% of what growers would need to comfortably be able to exit the industry.
While the buyout was intended to be an effective solution to help both sides deal with the growing economic strain, it is likely that Accolade will have to work to regain the confidence of Australia’s largest member-owned cooperative following the landslide rejection of its exit package. CCW, which provides grapes for Accolade brands such as Berri Estates and Banrock Station, has an annual crush of approximately 200,000 tonnes, or 10% of all wine produced in Australia.
Accolade’s proposal was issued following a meeting with growers earlier in the year where it stated that it was only required to purchase grapes that met “reasonable commercial requirements as to quantity, variety and quality.” Now under new equity owners Australian Wine Holdco Limited, Accolade has been undergoing a period of recapitalisaiton and restructuring that hopes to increase its better deal with the “number of challenging macroeconomic and industry headwinds in recent years.
“Our ability to respond to these challenges and grow has been hampered by an unsustainable balance sheet,” continued Foye.
Since then, Accolade has entered into ongoing discussions concerning a potential merger deal with Australian Vintage Limited and a potential sale of key brands to Pernod Ricard.
According to Robert Foye, the current economic pressures taking a hold of Australian wine warrant immediate and assertive industry action.
“As an industry, for us to continue as if no response is required simply isn’t sustainable,” he said.
“There has been a lot of discussion of the issue confronting our industry and we need to move the focus towards action and solutions.
“We have a shared responsibility to face into this challenge and respond.”
